HOW MILLENNIALS HANDLE MONEY
More often than not, millennials are considered materialistic and spoiled. People believe this generation has a sense of entitlement. However, millennials believe they cannot achieve majority of their financial goals such as landing their dream job and buying their own house. They also think repaying student loans has become harder, considering low-paying jobs and unemployment rate.
Perhaps one of the reason is this: during the Great Recession, more than 15% of millennials went out of work and are still struggling to recover from this adversity. Studies show those who were unemployed at that time were behind their financial schedules for 20 years or so.
Given these facts, how do millennials manage their finances?
According to a survey by the American Institute of Certified Public Accountants, more than three quarters of millennial people desire to buy the same clothes, cars, gadgets, and the like as their peers. Half of them use credit cards to sustain their daily living. The same finding shows over 25% of them do not pay their bills on time or contend with collectors, and more than half still receive financial assistance from their parents.
This is more alarming: seven of 10 young professionals define financial soundness as having the capability to settle their bills every month. There is a huge difference between genders in this generation. While men tend to splurge on material things, women are frugal and save money as much as they can.
One can attribute this mindset to what millennials see on social media. This generation feels the great pressure to mimic the habits of their fellows. A study by Towers Watson indicates the following: their tendency to buy branded clothes, cheap beers, and expensive wines.
On the contrary, the aftermath of the recession make millennials lower their home buying or usage of credit cards. Creditors have placed a more rigid requirement for loans and credit extensions. But it has reduced the debt obligation of this generation. Despite low level of financial literacy, they manage to live within their means.